Consumer lender Cattles bucked the downturn in spending growth to report a 12 per cent rise in interim profits.

The company, which recently opened an invoicediscounting operation in Birmingham, said it had achieved double digit growth while maintaing strong credit quality.

"Although we expect market conditions to remain challenging, our focus on controlled growth, underpinned by stable credit quality, will be maintained," said Sean Mahon, chief executive of the Batley-based group.

"Current trading is in line with our expectations."

Cattles, which largely lends to low-income earners who are usually unable, or choose not to, borrow from mainstream banks, said pretax profit before goodwill for the six months ended June 30 increased to £41.4 million from a restated £37 million at the same stage last year.

The firm said it signed 56,000 new direct repayment customer agreements in the period.

UK lenders are starting to feel the effects as households rein in spending to deal with higher bills and weightier borrowing costs.

Cattles, however, has held up better than industry rivals such as London Scottish Bank, which has been forced to close down branches and overhaul management amid slowing loan growth and rising bad debts.

Cattles Invoice Finance, the sole group corporate business following the sale of Commercial Finance for £70 million in January, had performed well, the company said.

Profits rose by 19 per cent to £1.4 million.

Cattles proposed an interim dividend of 5.05 pence per share, an increase of 11 per cent.